Why is Luke Gromen planning to sell most of his Bitcoin holdings by the end of 2025?

Macro analyst Luke Gromen sold off the majority of Bitcoin in November 2025 and explained his reasons in a year-end video. He believes AI is creating exponential deflation, and Bitcoin, as the “equity layer,” is the first to be hit in a deflationary environment. Conversely, silver has an advantage due to rising industrial demand and limited supply. Luke Gromen emphasizes that this is not a full liquidation but a wait for policy shifts to “nuclear-level money printing” before re-entering.

Luke Gromen: AI Deflation Destroys Capital Structure Equity Layer

Luke Gromen’s core argument is: in the current highly leveraged global economy, Bitcoin is in the “equity layer” of the capital structure. When liquidity is abundant and asset prices rise, the equity layer performs best. But when deflation appears, the equity layer is the first and most severely hit. In 2008, the equity layers of CDOs and CLOs disappeared this way, and Bitcoin, in the current system, is precisely in this position.

What truly changed Luke Gromen’s judgment is the exponential deflationary force created by AI and robots. This round of deflation has three characteristics: it stems from technological efficiency rather than demand cycles, it begins to impact employment—especially young workers—substantially, and it spreads very quickly. In this environment, any policy below “nuclear-level money printing” is effectively tightening. And in a tightening environment, the first to bear the pressure are the equity layers.

Luke Gromen admits: “My previous view of Bitcoin’s role in a ‘deflationary environment’ was wrong. I initially thought it would act more like a ‘neutral reserve asset’ in deflation. But reality has shown me: when deflation truly arrives, Bitcoin’s trading behavior is more like a high Beta tech stock.” This self-correction demonstrates the honesty of a professional analyst.

This also explains why Luke Gromen has become cautious about Bitcoin in the short term. He still believes that deflation will eventually trigger a crisis, and that crisis will likely force a large-scale monetary response. But he now thinks this step won’t come so quickly. Frankly, he overestimated the speed of policy response. He thought policymakers would act sooner, but they haven’t, and he doesn’t believe they will act very soon.

Three Main Reasons Luke Gromen Sold Out of Bitcoin

Bitcoin is fragile as an equity layer in a deflationary environment: it is the first to be hit when liquidity tightens, not a neutral reserve asset

AI-driven deflation is too fast for policy to keep up: exponential technological deflation is impacting employment, but nuclear-level money printing is still far off

Change in order of judgment: exit the most fragile layer first, and re-enter after prices fully reflect reality

Structural Logic of Silver as a Safe Haven

After selling Bitcoin, Luke Gromen turned to silver. This is not an emotional decision but a structural one. He sees: industrial demand continues to rise, supply-side has almost no capacity for rapid expansion, and even if prices increase, it’s difficult to quickly generate effective supply responses. Only a deep recession could destroy demand. But if that truly happens, the world would likely return faster to the “crisis—money printing” path.

From this perspective, the logic of silver is more direct and straightforward. Silver is both a precious metal (with monetary properties) and an industrial metal (needed for photovoltaics, electric vehicles, 5G). This dual nature supports it in both deflationary and inflationary environments. During deflation, silver’s monetary properties are highlighted; if nuclear-level money printing occurs, silver’s commodity properties will drive prices soaring.

Luke Gromen’s silver logic also relies on supply constraints. Unlike gold, most silver production comes as a byproduct of lead-zinc-copper mining, not dedicated silver mines. This means even if silver prices double, supply increases are extremely limited because mining decisions are primarily based on lead-zinc-copper prices, not silver. This supply inelasticity, amid rising demand, provides strong price support.

End of the Financial Priority World and Rebuilding Investment Logic

Luke Gromen discusses not just Bitcoin but a whole set of interconnected judgments. He believes we are leaving a “financial priority” world and entering a “return to realpolitik” world. Over the past thirty years, in the US markets, bonds have won, Wall Street has won, financial asset holders have won; meanwhile, manufacturing, industrial capacity, and the working class have been long squeezed.

Starting in 2025, with geopolitical competition, supply chain security, and industrial fundamentals becoming hard constraints, US government policy objectives are being forced to change. This macro signal is worth serious attention from all long-term investors: this world is no longer one where “financial assets naturally trend upward.”

Luke Gromen emphasizes: “I still have a long-term bullish view on Bitcoin. But this is a matter of order: before policy truly shifts, before ‘nuclear response’ appears, I prefer to first leave the most fragile part of the capital structure, and after prices reflect reality more fully, re-enter.” This phased retreat is not a denial of long-term logic but a capital-protection measure, waiting for a better entry point.